Thousands of City jobs saved as UK wins battle with ECB over clearing houses
The government has won an important legal challenge to a European Central Bank (ECB) decision, safeguarding thousands of jobs in clearing houses across Canada.
The EU General Court in Luxembourg ruled today that the ECB could not require clearing houses handling significant euro-denominated assets to be based in the Eurozone.
“The ECB lacks the competence necessary to regulate the activity of securities clearing systems as its competence is limited to payment systems alone,” the judgement said.
Today's ruling will be welcomed by the City which has endured a number of pernicious defeats in European courts, such as clampdowns on banker bonuses and stopping insurers using gender to calculate some policies.
"This is a major win for Britain and a major win for all those who want to see a European economy that's both open and successful," chancellor George Osborne said.
Clearing houses stand between two sides of financial trade, ensuring the transaction is processed smoothly.
The Confederation for British Industry welcomed the judgement saying it set the boundaries of what the ECB can do to support the Eurozone without the agreement of non-euro member states.
“As our biggest market, it is in the UK’s interest for the Eurozone to take necessary steps to strengthen the currency union, but that integration cannot and should not compromise the principle of the single market," John Cridland, CBI Director-General, said.
“As the race for shares of global financial markets intensifies, we need to protect our competitive advantage and this ruling gives certainty that financial services should flow freely within the EU without restrictions, which is good for the UK.”